Can the employee refuse to sign visa cancellation form before retaining his passport?

I have been disputing with my employer to release my passport as I have informed them that I will not sign the cancellation forms for my residence visa till I get my passport in my possession as I'm aware that the employer has no right to retain my passport for whatever reason.

The employer stated that they will only release my passport when I sign the cancellation form plus show them that I have received my new visa or leaving the UAE within the 30 days grace period.

I have repeatedly informed them that they don't have the right, but they keep telling me it's a new procedure that they need to hold my passport till I get a new work visa or leave the country within the grace period.

In my offer and my labor contract, there is no statement or I have given them a written consent in the first place to hand over my passport.

Please advise if I can open a case with regards to this.